Switzerland, a country with a special status outside the EU,banned the imports of agricultural products linked with the usageof specific pesticides and implemented restrictive policies forcrops derived from agricultural productions that use any kind ofchemical and natural product, which is not related to theprotection of the environment, food safety or health. a) Explainthe factors that have brought Switzerland to implement suchrestrictions, commenting on this trade policy approach. (10 points)b) Now suppose that Switzerland gives its agricultural industry anunfair advantage through underpriced loans and other exportsubsidies. These policies have disadvantaged the neighboringEuropean countries and contributed to the excess supply of Swissagricultural products in the EU. 1) Explain the economicconsequences of the Swiss export subsidy for the domestic price inSwitzerland, for Swiss consumers, for Swiss producers, for theSwiss government, and for the Swiss economy overall, as well as forthe number of goods exported, consumed, and produced, consideringalso the possibility to include graphical evidence of yourstatements. (6 points) 2) What is the possible reaction from theside of WTO and/or EU? (9 points)
